HSBC highlights income-splitting strategies for retirees
Married couples should be spreading their eligible income across both superannuation accounts in order to maximise the $1.6 million threshold, according to HSBC.
HSBC Australia head of wealth Scott Ellis says if one spouse has over $1.6 million and the other is under the cap, the spouse with the higher balance may want to consider withdrawing the excess and putting it into the other’s account.
“This will allow them to maximise the total amount, up to $3.2 million, that can be invested tax free,” Mr Ellis said.
“Similarly, singles whose pension account balance is over the new cap could consider withdrawing the excess funds in one lump sum and investing the capital elsewhere or back into an accumulation account before 30 June.”
HSBC said practitioners may also want to consider how their clients can restructure assets within a family to maximise eligibility for the age pension.
If a younger spouse is under the pension age, the other spouse could consider putting excess funds into the younger spouse’s superannuation account or alternatively withdrawing the excess funds to invest or spend elsewhere, HSBC said.
“For example, consider spending a portion of your excess funds on renovating your home now rather than in retirement or arranging a prepaid.”
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates. Miranda has also directed SMSF Adviser's print publication for several years.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.